The reduced aggregate volatility that began in 1984 has continued into the new millennium.

With help from accommodative monetary policy, there are good reasons to believe that the economy will achieve full employment and price stability fairly soon. That prospect raises challenging issues for Federal Reserve policymakers.

The Federal Reserve has a mandate to promote price stability and full employment. Generally, “price stability” is given a forward-looking interpretation. Policy should be conducted so that expected medium-term (two- to five-year) inflation is low and stable or, less strictly, so that...

A growing body of empirical macroeconomic literature suggests that analyses using real-time data often yield substantially different—and more accurate—conclusions.